Parties to a Bill of Exchange Video Lecture | SSC CGL Tier 2 - Study Material, Online Tests, Previous Year

parties to a bill of exchange now while
we have defined and discussed a bill of
exchange let us be very clear on the
parties to a bill of exchange it gets a
little confused to see as to who is a
drawer who is the acceptor who is a
drawing who is a pair who is a pay
etcetera etcetera etcetera the drawer X
has made the myth he writes the bill he
draws the been the person who draws is a
draw the person who makes is the maker
so in our example where X sold the goods
X is the draw our who is the drawer and
the person who draws the bill who makes
the bill and who is our dry the person
on whom it is made is the drawing who is
a pair the person who pays is a pair the
person to whom payment is made is the
pay so in this example in our example
when X is sold goods to Y so in our
example where X has sold goods to Y X
has made X has made drawn the bill of
exchange the person who draws is the
drawer the person on whom it is drawn is
the draw so he has made X has made he is
the maker he is the drawer of the bill
of exchange in a bill of exchange
it is the seller the seller the person
who has to get the money he is the
person who makes the bed that's why he
is the seller X is the creditor X is a
person who has sold the goods in wise
books in wise books X is shown as a
creditor what is the accounting entry
that Y passes in its books
he says purchase account debit to X X is
a creditor in wise books similarly in
the books of X what is the entry X has
made a sale and
is why account debit to savers so why is
a data in the books of X while X is a
creditor in the books of Y so in a bill
of exchange the person who makes the
bill the drawer the maker is nobody but
the seller the creditor so who is the
droid the person on whom the bill is
made that is why why is the drawee he is
called the employee the person on whom
the bill is prime he is also called the
acceptor without his acceptance the bill
is not a valid bill of exchange he signs
and accepts agrees to make the payment
on the particular day he is the acceptor
he is the data he's the person who is
buying the goods wise account is the
debtor in the books of X he is the
person who has to pay the person who has
to pay is called the payer payer the
person who receives the payment is
called the P he is a pair and he is the
bio now we have mentioned a payee
separately here because in the bill of
exchange in the specimen that we saw we
saw that 3 months from now paid so Han
or order and it was made by so on but it
is quite possible that so Han says
instead of saying pays so Han he may say
pay X or py or PZ so in a bill of
exchange it is not necessary that the
drawer is the person who will get money
he may instruct he may instruct the
person on whom the bill is drawn to make
payment to anybody else so there are
actually three parties to a bill of
exchange
one is the maker the drawer two is the
drawee of the acceptor who accepts the
bill on whom the bill is drawn he is the
pay
and the payee that is the person who
will receive the payment maybe a third
person so on the bill X might say three
months from now pay Z or order two peas
off or amount of rupees 20,000 in that
that case we have three people X the
maker the drawer X was the person who
sold the goods the seller the creditor
next it is drawn on why because it is
drawn on why Y is called the Roy II he
is the acceptor of the belt he is the
person who has bought the goods and is
the debtor he is the buyer he is also
the person who will have to make payment
the person who has to make payment he is
the payer he is a pair and though it is
quite possible that the pay and the
drawer are one and same it in a will of
exchange there is a chance that the
payee is a different person says it in
this particular case so you have three
parties to a bill of exchange once this
bill of exchange is made it is possible
that mr. X transfers this endorses this
to somebody else if X endorses X is
called the endorser the person to whom
it is endorsed is called the endorsee is
called a endorsee so if X has made a
bill asking why to pay X three months
from now we have a situation where X is
the drawer why is the drawee and X is
also happens to be the payee the person
who will receive the payment and that in
this example that I have just narrated
you have only two parties to the
benefics change now it is possible that
after the bill of exchange is made X
transfers this bin to set
this is called endorsement so X is the
endorser who is transferring the belt to
Z Z is the endorsee so the parties to a
bill of exchange could be 3d draw who is
the maker of the bill who was the person
who sold the goods and is therefore the
creditor the bill is drawn on why
who is the Droid he is the one who
accepts the bill he is the one who's
bought the goods he is the dater
he is the one who has to make the
payment he is the payer it is possible
that the payee is a different person
since a bill can be made payable to
another person not necessarily the
person who is making the bet so there
could be a third person called the P
after a bill of exchange is made if it
is transferred or endorsed to somebody
else
that's an act of endorsement the person
to whom it is in Dutch is called the
endorsee
let us look at a specimen of a bill
where we have a drawer at Royal and a
pay three different people this is the
same format which has been made by so
Han so Han is the drawer the maker he is
the person who sold the goods he is the
creditor so saw handmade the bill it was
accepted by Mohan since the bill was
drawn on Mohan Mohan is the draw Mohan
is the person who will make the payment
since he will make the payment he will
be the also the payer he is the person
who bought the country's the buyer
he is the debtor he has to make the
payment he is the payer now what is
different in this specimen is that what
is the bill say the bill is dated it's
an amount of rupees 1 lakh it says three
months after pay Mesa's Ramla land sons
or order the sum of rupees one lakh so
the payment is being made to Rama lull
and sons Ramla and sons is the pay now
we have three parties one is so hot the
person who made the bill the maker of
the bill of the drawer of the bill it
was accepted and it was drawn on Mohan
Mohan is the person who will make the
payment but whom will he make the
payment to he will make the payment to
Ramla and sons so wrong Lal and Sons is
the payee who is appe the person who
will receive the money is the pain the
person who will make the payment is the
payor so in this is an instance of a
bill of exchange where you have three
parties to the bill of exchange the
drawer is different the drawee is
different and the payee is different